Inflation Resource Center | Lord Abbett | Lord Abbett

 

Inflation Resource Center

In today's market environment, many are focused on the potential investment implications of rising inflation. While Lord Abbett's experts say they don't think now is the time to make drastic changes to a portfolio, this Reource Center provides thoughtful insights and potential solutions for a number of situation-based outcomes.

 

 

 

 

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Potential Solutions to Consider

Whether preparing for an inflationary environment, or seeking a flexible fixed-income solution for a number of market outcomes, Lord Abbett offers several funds. Below, a depiction of total return over historical periods where the 10-Year Breakeven Inflation Rate increased 40 basis points (bps), compared to the iShares TIPS Bond ETF (TIP).

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Total Return Since 2012 when 10-Year Breakeven Inflation Rate rose by 40bps or more

09/22/2011 - 09/14/2012

01/13/2015 - 05/05/2015

02/11/2016 - 04/28/2016

06/27/2016 - 01/27/2017

06/20/2017 - 05/15/2018

03/19/2020 – 06/30/2021

Average:

iShares TIPS Bond ETF (TIP)

7.80%

0.13%

2.83%

-0.06%

0.28%

13.75%

4.12%

Inflation Focused Fund F (LIFFX)

10.68%

2.57%

5.36%

13.24%

4.49%

25.66%

10.33%

Bond Debenture Fund F (LBDFX)

14.49%

3.34%

9.41%

15.35%

3.02%

21.66%

11.21%

Short Duration Income Fund F (LDLFX)

6.62%

1.04%

2.53%

2.79%

0.81%

6.81%

3.43%

Floating Rate Fund F (LFRFX)

10.70%

2.93%

4.61%

10.49%

4.43%

16.30%

8.24%

Increase in 10-Year Breakeven Inflation

93bps

40bps

54bps

74bps

52bps

182bps

74bps

F-Share: LIFFX

Inflation Focused Fund

The Fund seeks to deliver total returns that exceed the rate of inflation in the U.S. over a full inflation cycle and current income by combining investments in inflation-linked derivatives with a portfolio of fixed income securities.  

F-Share: LBDFX

Bond Debenture Fund

The Fund seeks to deliver high current income and long-term growth of capital by investing primarily in a variety of fixed income securities and select equity-related securities.
 

F-Share: LDLFX

Short Duration Income Fund

The Fund seeks to deliver a high level of current income consistent with the preservation of capital by investing in a variety of short maturity debt securities including, corporate bonds, U.S. government securities, and mortgage- and other asset-backed debt securities.
 

F-Share: LFRFX

Floating Rate Fund

The Fund seeks to deliver a high level of current income by investing primarily in a variety of below investment grade loans.


 

Insights on Inflation

Article

Broad-Based Price Increases Signal Potential for Persistent Inflation

The October CPI (Consumer Price Index) report suggests higher inflation could last for longer.

 
Video

Insights on Inflation

Lord Abbett Partner and Director of Strategic Asset Allocation, Giulio Martini, shares his perspective on inflation and key takeaways for investors, explaining why he thinks it’s too early to get defensive.

Podcast

Podcast: Strategic Thinking on Inflation

In this podcast, Lord Abbett experts examine the current inflationary environment, and look to history for potential portfolio responses.

The performance data quoted reflect past performance and are no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that shares, on any given day or when redeemed, may be worth more or less than the original cost. You can obtain performance data current to the most recent month-end by calling Lord Abbett at 888-522-2388 or referring to lordabbett.com.

F Share Performance as of 06/30/2021 for Short Duration Income Fund for the one-year period was 4.16%; three-year, 3.54%; five-year, 2.87% ; and 10-year, 2.93%.

F Share Performance as of 06/30/2021 for Inflation Focused Fund for the one-year period was 19.34%; three-year, 4.75%; five-year, 4.78% ; and 10-year, 1.84%.


F Share Performance as of 06/30/2021 for Floating Rate Fund for the one-year period was 12.58%; three-year, 2.40%; five-year, 3.66% ; and 10-year, 3.96%.

F Share Performance as of 06/30/2021 for Bond Debenture Fund for the one-year period was 14.27%; three-year, 7.02%; five-year, 7.03% ; and 10-year, 6.41%.

Fund Expense Ratio Detail: Reflects expenses for the Fund's fiscal year-end and is subject to change. Fund expenses may fluctuate with market volatility. A substantial reduction in Fund assets (since its most recently completed fiscal year), whether caused by market conditions or significant redemptions or both, will likely cause total operating expenses (as a percentage of Fund assets) to become higher than those shown. Short Duration Income Fund F Share Fund Expense Ratio: 0.49%. Inflation Focused Fund F Share Fund Expense Ratio: 0.60%. Floating Rate Fund F Share Fund Expense Ratio: 0.70%. Bond Debenture Fund F Share Fund Expense Ratio: 0.68%. 

The Fund's portfolio is actively managed and is subject to change.

A Note about Risk: The Fund is subject to the general risks associated with investing in debt securities, including market, credit, liquidity, and interest rate risk. The value of an investment in the Fund will change as interest rates fluctuate in response to market movements. When interest rates rise, the prices of debt securities are likely to decline, and when interest rates fall, the prices of debt securities tend to rise. Debt securities are subject to credit risk, which is the risk that the issuer will fail to make timely payments of interest and principal to the Fund. The Fund may invest in foreign or emerging market securities, which may be adversely affected by economic, political, or regulatory factors and subject to currency volatility and greater liquidity risk. The Fund may invest in derivatives, which are subject to greater liquidity, leverage, and counterparty risk. Although the Fund may invest in money market securities, this is not a money market fund. These factors can affect Fund performance. Past performance is no guarantee of future results.

The Overall Morningstar RatingTM is derived from a weighted average of the performance figures associated with a fund's three-, five-, and 10-year (as applicable) Morningstar RatingTM metrics. © Morningstar, Inc. All rights reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.  Morningstar rated the Lord Abbett Inflation Focused Fund class F share 1 and 1 stars among 197 and 173 Inflation-Protected Bond Funds for the overall rating and the 3 and 5 year periods ended 03/31/2020, respectively.

iShares TIPS Bond ETF (TIP):  The investment seeks to track the investment results of Bloomberg Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L) which composed of inflation-protected U.S. Treasury bonds. The fund generally invests at least 90% of its assets in the bonds of the underlying index and at least 95% of its assets in U.S. government bonds. It may invest up to 10% of its assets in U.S. government bonds not included in the underlying index, but which BFA believes will help the fund track the underlying index. It also may invest up to 5% of its assets in repurchase agreements collateralized by U.S. government obligations and in cash and cash equivalents.

This material must be accompanied or preceded by the Fund's current prospectus or summary prospectus. The summary prospectus and prospectus contain important information about the Fund, including the Fund's investment objectives, risks, charges, and ongoing expenses that an investor should read and carefully consider before investing. Please click here for the Fund's current prospectus or summary prospectus.

The information provided is not directed at any investor or category of investors and is provided solely as general information about Lord Abbett’s products and services and to otherwise provide general investment education.  None of the information provided should be regarded as a suggestion to engage in or refrain from any investment-related course of action as neither Lord Abbett nor its affiliates are undertaking to provide impartial investment advice, act as an impartial adviser, or give advice in a fiduciary capacity.   If you are an individual retirement investor, contact your financial advisor or other fiduciary about whether any given investment idea, strategy, product or service may be appropriate for your circumstances.

This material has been prepared exclusively for use by analysts, institutional investors (as such term is defined in various jurisdictions) and their consultants, registered investment advisors, broker-dealers, and sponsors of plans with a minimum of 100 participants. It is not intended for, and should not be used with, small plan sponsors, plan participants, retail investors or the public in written or oral form or for any other purpose. This document has not been filed with, or approved by, any regulatory authority in any jurisdiction.

 

Ask about our Inflation Focused Solutions.

Financial professionals: 201‑827‑7998.

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